The Way To Win The Chinese Consumer Goods Enterprises

In China consumer goods Market, channel Being king has become the common cognition of Chinese and foreign consumer goods enterprises. So, consumer goods enterprises in China market What challenges do we have to become the king of channel? How to establish channel management capabilities and advantages?

As a country with 1 billion 300 million population and sustained and rapid economic growth, China is a huge consumer market with huge potential for development. It has become a "battleground" for the global consumer goods enterprises. Many large international enterprises have "beachhead" and have been competing fiercely with local enterprises. The research shows that the slogan of "channel is king" has certain rationality: controlling and managing channels can provide consumers with better terminal consumption experience, and can also establish certain competitive advantages and enter barriers. From this perspective, if we want to succeed in the Chinese consumer goods market and remain invincible, controlling and managing sales channels is the key.

　 The challenge of becoming the "king of channel"

It is not easy to effectively control and manage sales channels in the Chinese consumer goods market. On the contrary, Chinese and foreign consumer goods enterprises, which fail or even die suddenly due to poor management of sales channels, are everywhere. The challenge of becoming the "king of channel" comes mainly from the following three aspects:

1., the channel is scattered. The concentration ratio of Chinese consumer goods distributors and retail terminals is relatively low, and there is almost no nationwide or even trans regional unified distribution network. In order to cover the national market, consumer goods enterprises need to develop and maintain a large number of distributors, which increases the difficulty and risk of management.

2. regional differences are great. The level of market development varies from place to place. Even in the same area, there are obvious differences between urban and rural areas, and the main modes of sales channels are complex and diverse. Consumer goods enterprises must formulate channel strategies according to local conditions, and at the same time skilled management and operation of a variety of channel models, increasing the complexity of management.

3. many non-standard and non market factors. Due to the immaturity of the market, especially in the two or three tier cities, distribution and retail operations exist many non-standard places. Therefore, local experience and network relationship become the key to enter the market and effective control channels. In some areas, the importance of products and brands even reside. Consumer goods enterprises need flexible and diversified means in the face of many "Chinese characteristics". They also face complex game with distributors and retail terminals.

How to become the "king of channel"

Facing the complex Chinese consumer goods market, consumer goods enterprises need to continuously improve and improve the operation and management of sales channels according to the stage requirements of market development and their product category characteristics. That is to say, for different stages of market development and product category, the answer of king of channel is different and needs to keep pace with the times. Because of the different characteristics of various consumer products, the success and emphasis of marketing channel management will inevitably change. It is necessary to make a difficult choice between various factors. The core is how to find a balance between the rapid expansion and intensive cultivation.

For example, the key success factors of some categories are to provide a good and differentiated terminal consumption experience for target consumers, so the focus of channel operation management is to control the channel and terminal execution. Taking the clothing industry as an example, the key to success is to enable consumers to appreciate the influence of brands in the buying process and feel the difference from competing products. Therefore, enterprises often adopt the sale mode of exclusive retail terminal, so as to keep customers' consistency in the consumption experience in the store. For those with low differentiation, the key to success lies in the rapid and comprehensive coverage of the market. Therefore, enterprises will tend to rely on the channel resources of distributors to complete rapid coverage and geographical expansion.

Furthermore, the relative importance of brand pull and channel thrust and the ability of middlemen to control sales terminals are also important factors to consider. Generally speaking, the more important the channel thrust is, the stronger the middleman's ability to control the sales terminal is, the higher the dependence on the large strong dealers. A typical example is the drinking market of some alcoholic beverages.

　 Establishing channel management capabilities and advantages

Although different enterprises have developed different solutions due to the characteristics of different categories, there are many similarities and differences in the ways and means of finding suitable solutions. Specifically, when considering the sales channel and terminal operation management mode, we need to consider the following six aspects.

　 Channel mode

The final choice of channel mode requires the overall consideration of the characteristics of the category, the enterprise's own strategy and characteristics. In order to improve efficiency and facilitate management, enterprises usually need to ensure that they take a small number of (2~3) channel modes in all the markets they cover. The sales channel mode includes three levels: channel division of labor, channel structure and coverage mode.

Generally speaking, there are four representative modes of division of labor: in the mode of distribution, distributors undertake the main tasks of channel operation and management, including the development and control of retail terminals; the mode of cooperation is the front-line work of direct management of retail terminals by enterprises, while distributors are still responsible for customer development, contract negotiations, allocation of goods and terminal receipts, and so on. In distribution mode, enterprises are directly responsible for customer development, contract negotiations and terminal maintenance. Dealers are degenerated into "distributors". Finally, under direct selling mode, enterprises not only directly manage retail terminals, but also are responsible for distribution and distribution, and no longer need distributors as intermediaries.

The advantages and disadvantages and application fields of the above four modes of division of labor are mainly reflected in the capacity demand. In the mode of distribution, enterprises must have effective ability to control and control dealers, and dealers themselves are relatively strong in order to effectively meet the requirements of enterprises. In the mode of cooperation and distribution, the capability requirements of enterprises are mainly concentrated on terminal and sales personnel management and control, while distributors or distributors focus on financial strength and logistics capability. Under the direct selling mode, the situation is opposite to the distribution mode. At the same time, it is suggested that enterprises consider regional differences and choose suitable regional channel division of labor mode instead of forcing "unification".

Finally, according to the size of the distributor, three ways of channel coverage can be summarized: the first is that a large distributor covers several provinces or regions at the same time, which is easy to form scale effect and reduce the management cost of dealers. But it is also easy to form a strong dealer and a threat to enterprises. The second one is to cover a province or a few key cities by medium scale distributors. This mode is limited in resource integration among provinces or regions, but it can effectively control the retail terminals of key markets, and its number is still controllable to avoid over high human and logistics costs; the third is covered by different small distributors. Different coverage methods have different advantages and disadvantages in three aspects: Dealer resource integration difficulty, channel management cost and control strength. Enterprises should choose the dealer size and coverage mode suitable for their needs.

In a word, in the complex consumer goods market, the development of channel mode presents a variety of characteristics. It is necessary to choose the channel mode according to the different category characteristics and different degree of development.

　 Channel partner management

After clearly choosing and defining the channel mode, how to effectively manage the channel partners becomes a key issue. Specifically, it includes the following aspects: 1. tailor the price system according to the chosen channel mode; 2., ensure that the channel partners get a reasonable and competitive return on investment; and 3., strengthen the control and assessment of the channel partners.

Among them, the key to fair and effective assessment and encouragement is effective supervision and control of the actual work and implementation of the channel partners. Enterprises usually have some one-sided understanding, for example, in order to strengthen the control of channels, it is best to choose small dealers and adopt a flat channel structure. Of course, small dealers are more likely to be "obedient" because of their limited financial strength, but their capabilities and development potential are relatively limited. Enterprises may achieve the purpose of control, but they are outweighed by the need to invest more resources and energy in channel management. In addition, a powerful distributor may be strong, but if an enterprise can bring its own advantages into full play and achieve mutual benefit and win-win results, it can also effectively control the channel partners and even the retail terminal with strong brand and product pull.

Another frequently cited concern is how to effectively channel partners and control risks. It is noteworthy that some innovative non conventional practices, such as the use of equity linked form, including stock incentives, capital injection and cross shareholdings. One of the more representative ways is to inject equity into channel partners and share some of their share discount as a reward to channel partners so that both parties have the right to share each other's overall revenue. At the same time, in operation, enterprises usually give such partners some special preferential policies to help them expand the local market. Experience shows that this way of closely linking the interests of both sides is often a double-edged sword: in a short time, it can stimulate local small channel partners to a great extent, and expand the market quickly and form a certain scale. However, if handled unproperly, it will also leave behind hidden dangers, so that these channel partners will increasingly require enterprises to give them more preferential policies after they grow up, to attack other small and weak dealers, to exploit the profit margins of enterprises, and directly affect their own interests.

Finally, no matter what type of sales channel is adopted, market regulation, especially the maintenance of price system is very important. Therefore, inspection and supervision of market and channel is also an essential system and capability for enterprises.

Sales force management

Before upgrading the sales team's capabilities, it is necessary to clarify the business responsibilities of the sales team. At present, most enterprises agree to make brand by market, and sales focus on channel management. However, the important issue of how to effectively link brand planning and execution is often ignored by everyone. The key to this connection is the marketing department. As a bridge between market and sales, the marketing department is responsible for refining the marketing plan formulated by the marketing department according to the regional characteristics, guiding the execution of the local sales, and checking the final implementation results and related sales expenses.

After clarifying the division of functions of the market, marketing and sales team, enterprises need to reform in the following three aspects: 1., design a reasonable organizational structure and staffing, formulate a relatively unified sales process and store standards; 2., formulate corresponding assessment indicators and incentive mechanisms; 3., strengthen personnel management, training and retaining talents.

First of all, enterprises need to design a reasonable sales staff allocation and sales team organization structure: according to the number of stores and visiting time under different modes, formulate a national uniform sales personnel standards. In addition, enterprises should also design the organizational structure, set up strict guidance standards for the organization level and management authority, and set up a national consistent accountability mechanism for all levels, so as to realize the three links of staffing, work scope and responsibility distribution, so as to avoid the situation of excessive levels and overstaffing. In terms of organizational level and management authority, the best practice is to set up 4~5 levels from the national sales director or the general manager to the front-line sales representative, with a management radius of 8~12 at each level.

Secondly, enterprises need to establish performance appraisal indicators and incentive mechanisms for salesmen, and ensure that performance appraisal indicators and incentive mechanisms are in line with the direction of market expansion strategy and the need to meet competition. Enterprises should also understand the gap by comparing them with their competitors, and develop corresponding sales performance appraisal indicators and incentive measures based on these gaps, so as to improve the performance of these aspects. Enterprises also need to design sales processes through key processes and key performance indicators to prevent sales staff from taking care of themselves. They only care about mature and highly profitable businesses, but avoid important issues such as store expansion, new product listing, single store output and retail execution. At the same time, enterprises often cover different markets through various channels. Therefore, it is necessary to design the sales team structure and the corresponding assessment mechanism coexisting with multi channel modes.

Thirdly, in order to cultivate and retain excellent salesmen, enterprises need to establish effective bonus system, job promotion plan and diverse staff activities to strengthen talent management. {page_break}

　　 Background system support

Enterprises need strong backstage system as support for the reform of channel mode. This requires effective improvement for human resource management, exclusive channel management team building and technical solutions.

First of all, the reform of channel mode will put more demands on the human resources department. This is because: first, different channel models have different needs for employees' capabilities. They need the human resources department to recruit and train salesmen in a targeted manner. Second, after the channel mode is confirmed, enterprises should carry out a lot of work to systematically improve the efficiency of salesmen, which requires the human resources department to cooperate with each other. Therefore, a strong system is needed to support the work of the human resources department.

Secondly, many consumer goods enterprises have set up exclusive salesmen and channel management teams to take charge of channel capability improvement. This is mainly because the promotion of channel capacity requires continuous and large amount of work, while salesmen are busy with their sales targets and bear great pressure of performance. It is very difficult to push the work uninterrupted. The establishment of an exclusive sales and capability enhancement team aims to develop a variety of leading sales management tools and processes through some professional talents, so as to continuously enhance the consistency, professionalism and efficiency of the sales team, and ultimately form the competitive advantage of the enterprise.

Thirdly, the improvement of channel management capability is inseparable from the support of technical solutions. The most common problem faced by many domestic consumer goods enterprises is the collection of terminal sales data, which brings a lot of trouble for enterprises to formulate marketing strategies. It should be noted that only after the standardization of channel management mode and sales process can the technical solution be implemented, which may require a long-term process.

　　 Key customer management in modern channels

Modern channels have become the most important sales channels in many areas. In the future, the importance of them will be even higher. Enterprises usually need to take direct customer oriented mode to serve these modern channel retailers directly.

First of all, the key customer management of modern channels should be based on "knowing one's own knowledge". We need to have a deep understanding of the characteristics and needs of key customers in the aspects of profit mode, procurement decision, fine management level and operation standard of procurement category, and some of them will set up key customer management and operation systems. Similarly, in the three aspects of purchasing decisions, fine management level and operation standard, we also need to have a thorough understanding of the needs of each other and achieve targeted goals. On this basis, enterprises need to implement differentiated differentiated services and management strategies, that is, to provide customized cooperation mode for every key customer.

Secondly, due to the importance of key customers and personalized service management needs, enterprises usually need to consider and arrange sales organizations for key customers. The key is that the sales organization mode of the enterprise needs to match the purchasing mode and service requirements of the key customers. For example, large chain retailers often adopt cross regional or even national contract negotiations or even centralized procurement, and there are corresponding functional division and positioning and business relationship maintenance requirements at retailers headquarters, regional and store level. Therefore, many consumer goods enterprises will consider implementing different levels of "independent management" and "resource list" for key customers in modern channels, that is, establish a full-time sales team of key customers, and list key customers in the sales plan and budget.

Thirdly, enterprises need to train targeted customers' skills and enhance their ability.

　 Reform plan and pilot project

The continuous transformation of sales and distribution system has brought enormous challenges both inside and outside the enterprise. Many enterprises have adopted a cautious and scientific reform plan. Under ideal circumstances, enterprises should launch several pilot projects to test new development processes and tools in different cities with different channels and stages of development. It is only when we are confident that these tools and processes can be implemented across the country that formal changes will take place. In the process of reform, there is a lot of misgivings about many employees, employees and distributors. Enterprises should vigorously publicize the contents of change and the underlying concepts to the affected employees and business partners. Through publicity, in addition to building trust and eliminating doubts, it can also play an important role in educating employees and partners and encouraging them to change their long-standing inherent attitudes and habits.

China's 1 billion 300 million consumers have brought great opportunities to the consumer goods market, but consumer goods enterprises still have to face the challenge of continuous development in the Chinese market. It is still a difficult task to send goods to consumers everywhere. Only by developing a complete and effective channel reform plan can consumer goods enterprises win a victory in China's consumer goods market.

Consumer goods enterprises should constantly improve and improve channel solutions according to the market development stage and their product category characteristics, and find a balance between the rapid expansion and intensive cultivation.